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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) - May 17, 2000
ELECTRIC FUEL CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-23336 95-4302784
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(Commission File Number) (IRS Employer Identification No.)
120 Wood Avenue South, Suite 300, Iselin, New Jersey 08830
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(Address of principal executive offices)(Zip Code)
(732) 635-7100
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(Registrant's telephone number, including area code)
This is page 1 of 22 pages (including Exhibits)
Exhibit Index appears on page 4.
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ITEM 5. OTHER ITEMS
On May 17, 2000, we entered into an agreement (the "Purchase Agreement") with
Koor Industries Ltd. ("Koor") pursuant to which Koor agreed to purchase 1
million shares of our common stock at $10 per share, for a total cash investment
of $10 million. Upon the completion of this investment by Koor, also on May 17,
2000, we and Koor agreed, pursuant to a Termination and Release Agreement dated
as of that date, that the agreements previously jointly announced on March 15,
2000 would be canceled and that we would not proceed with the previously
announced investment by Koor or acquisition of Koor's subsidiary Tadiran
Batteries Ltd.
Pursuant to the terms of the Purchase Agreement, if, within six months after
the making of the investment, we sell shares of our common stock or securities
convertible into our common stock (other than to our employees or consultants
pursuant to our stock option plans) at a price below $10 per share, we will
issue to Koor additional shares such that the total number of shares issued to
Koor multiplied by the lower stock price equals $10 million. In addition, with
respect to any portion of the shares still held by Koor at the end of the six-
month period following the investment, if our stock is at that time trading
below $10 per share, we will adjust the number of shares held by Koor in a
similar manner based on the average trading price over the preceding 30 days,
but not to any price lower than $6.75 per share.
In connection with the Purchase Agreement, we also entered into a Registration
Rights Agreement with Koor pursuant to which we have agreed to register the
shares issued to Koor, and Koor has agreed to certain limitations on the resale
of the shares in the six months following the investment.
The foregoing descriptions of the Purchase Agreement, Termination and Release
Agreement, and Registration Rights Agreement are qualified in their entirety by
reference to the agreements themselves, which are attached to this report as
Exhibits 4.1 through 4.3, and which are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits. A list of exhibits is given in the Exhibit Index that precedes
the exhibits filed with this report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
ELECTRIC FUEL CORPORATION
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(Registrant)
Date: May 23, 2000 By: /s/ Robert S. Ehrlich
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Robert S. Ehrlich
Chairman of the Board and
Chief Financial Officer
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EXHIBIT INDEX
The following exhibits are filed with the Current Report on Form 8-K.
Exhibit No. Description
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4.1 Common Stock Purchase Agreement, dated May 17, 2000, between
Electric Fuel Corporation and Koor Industries Ltd.
4.2 Registration Rights Agreement, dated May 17, 2000, between
Electric Fuel Corporation and Koor Industries Ltd.
4.3 Termination and Release Agreement, dated May 17, 2000, among
Electric Fuel Corporation, Tadiran Limited, Tadiran Batteries
Limited, Tadiran Electric Industries Corporation, Koor Industries
Ltd. , Robert S. Ehrlich and Yehuda Harats.
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Exhibit 4.1
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ELECTRIC FUEL CORPORATION
COMMON STOCK PURCHASE AGREEMENT
May 17, 2000
To: Koor Industries Limited
Ladies and Gentlemen:
Electric Fuel Corporation, a Delaware corporation (the "Company"), proposes
to sell (the "Offering") to Koor Industries Ltd. (the "Purchaser") 1,000,000
shares (the "Shares") of Company's Common Stock, $0.01 par value per share, at a
purchase price per share of $10, for an aggregate investment amount of
$10,000,000 (ten million) (the "Purchase Price"). In connection with and in
consideration for the sale and purchase of the Shares, the Company and the
Purchaser agree to abide by the mutual covenants contained herein.
1. Sale and Purchase of the Shares. On the basis of the representations,
warranties and agreements contained in, and subject to the terms and conditions
of this Share Purchase Agreement (the "Agreement"), the Company agrees to sell
to the Purchaser, and the Purchaser agree to purchase from the Company, the
Shares. The purchase price per share shall be $10.
In the event that within the 180 days immediately following the Closing
hereunder (the "Investment Adjustment Period"), the Company issues shares of its
Common Stock or securities convertible into its Common Stock at a price per
share below $10, other than to its employees and consultants under its Stock
option Plan (the "Investment Adjustment Price"), then it shall issue to the
Purchaser, for no additional consideration, additional shares of the Company's
Common Stock such that the total number of shares of the Company's Common Stock
issued in consideration for the Purchase Price multiplied by the Investment
Adjustment Price shall equal the Purchase Price.
In addition to the above, In the event that the average closing price of
the Company's Common Stock on the Nasdaq National Market ("NASDAQ") for the 30
days ending on the day (the "CERTAIN DAY") immediately preceding the date which
is six months following the Closing (the "ACQUISITION ADJUSTMENT PRICE", and
such 30 day period, the "ACQUISITION ADJUSTMENT PERIOD") is below $10 (the
"REDUCED PRICE"), the Company shall issue to the Purchaser, for no additional
consideration (the "ACQUISITION ADJUSTMENT"), additional Common Stock of the
Company calculated in accordance with the following formula:
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A = (10,000,000/B - 1,000,000) * C
Whereas:
A = number of additional Common Stock issued for no consideration under
the Acquisition Adjustment;
B = the Reduced Price;
C = a fraction, the numerator of which is 1,000,000 minus the number of
all Common Stock sold by the Purchaser until Certain Day, and the
denominator of which is 1,000,000;
PROVIDED, HOWEVER, that in no event shall the Company be required to issue
shares in excess of 481,481 (four hundred and eighty one thousand, four hundred
and eighty one) additional shares of its Common Stock in satisfaction of its
obligations under the Acquisition Adjustment, except with respect to any stock
splits or other recapitalizations.
2. Delivery and Payment. Concurrently with the signature of this
Agreement, the Purchaser will pay to the Company the Purchase Price and the
Company shall deliver the Shares to the Purchaser. Payment of the Purchase
Price shall be made by wire transfer in immediately available funds in U.S.
dollars to account number # 023248 in the name of Electric Fuel Limited at
First International Bank, Jerusalem, Branch 012, provided, however, that the
Purchaser may, at their option wire New Israeli Shekels in lieu of U.S. dollars
at the Bank HaPoalim U.S. dollar cash sell rate (i.e. the rate at which the
bank sells to buyers) as of the Closing of the Offering. The closing (the
"CLOSING") of the Offering shall take place concurrently with the signature of
this Agreement at the offices of Meitar, Liquornik, Geva & Co.. The day on
which the Closing takes place shall be referred to herein as the "Closing
Date".
3. Offering of Shares. The Shares will be offered and sold to the
Purchaser without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance on the exemption therefrom provided by
Section 4(2) of the Securities Act.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of Delaware.
The Company's wholly-owned Israeli subsidiary, Electric Fuel (E.F.L.)
Limited ("EFL"), is duly incorporated and is validly existing. Each of
the Company and EFL is qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its
business makes such qualification necessary, except for such jurisdictions
where the failure to so qualify, individually or in the aggregate, would
not have a material adverse
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effect on the assets or properties, business, results of operations or
financial condition, taken as a whole, of the Company and EFL.
(b) All necessary corporate action has been duly and validly taken to
authorize the execution, delivery and performance of this Agreement by the
Company. This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(c) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby or thereby (including, without limitation, the issuance and sale by
the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default
(or an event which with notice or lapse of time or both would constitute a
default) under, or require any consent or waiver under, or result in the
execution or imposition of any material lien, charge or encumbrance upon
any properties or assets of the Company pursuant to the terms of, any
material indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which the Company or any
of its properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation applicable to
the Company, or violate any provision of the charter or by-laws of the
Company or EFL, except for such consents or waivers that have already been
obtained and are in full force and effect, or such consents or waivers the
failure to so obtain would not individually or in the aggregate, have a
material adverse effect upon the assets or properties, business, results of
operations or financial condition, taken as a whole, of the Company and
EFL.
(d) The Company's Annual Reports on Form 10-K for the fiscal year
ended December 31, 1998 and December 31, 1999, the Company's Form 10-Qs for
the fiscal periods ended March 31, 1999, June 30, 1999, September 30, 1999
and March 31, 2000 and all documents filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (such documents are
hereinafter referred to as the "Exchange Act Documents") were filed in a
timely manner and, when they were filed (or, if any amendment with respect
to any such document was filed, when such amendment was filed), conformed
in all material respects to the requirements of the Exchange Act, and the
rules and regulations thereunder, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Subsequent to the respective dates as of which information was given in the
Exchange Act Documents, except as described therein, there has not been any
material adverse change in the Company's operations, and, to the Company's
knowledge, no event has occurred which with notice or lapse of time or
both,
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that would constitute such a material adverse change, in the assets or
properties, business, results of operations or financial condition of the
Company taken as a whole.
(e) Other than as previously disclosed to the Purchaser, there are no
claims for brokerage commissions or finder's fees on similar compensation
in connection with the transactions by this Agreement based on any
arrangement or agreement made by or on behalf of the Company other than as
previously disclosed to the Purchaser, and the Company agrees to indemnify
and hold the Purchaser harmless against any damages incurred as a result of
any such claims.
5. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to Company that:
(a) It has full power and authority to execute, deliver and perform
this Agreement. This Agreement constitutes a valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
(b) The Shares, to be received by the Purchaser will be acquired for
investment for the Purchaser's own account, and not with a view to the
distribution of any part thereof. Other then in context of "Hedging"
transactions, the Purchaser has no present intention of selling, granting
any participation in, or otherwise distributing the same. The Purchaser
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer, or grant participation to such person or to any
third person, with respect to any of the Shares.
(c) The Purchaser understands that the Shares may not be sold,
transferred, or otherwise disposed of without registration under the
Securities Act, or an exemption therefrom, and that in the absence of an
effective registration statement covering the Shares or an available
exemption from registration under the Securities Act, the Shares must be
held indefinitely. In the absence of an effective registration statement
covering the Shares, the Purchaser will sell, transfer, or otherwise
dispose of the Shares only in a manner consistent with its representations
and agreements set forth herein.
(d) The Purchaser understands that until the Shares are registered
under the Securities Act, the certificates evidencing the Shares may bear
substantially the following legends:
(i) "THE SECURITIES EVIDENCED HEREBY WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND APPLICABLE
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STATE LAW, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM (IN EACH CASE BASED UPON
DOCUMENTATION SATISFACTORY TO THE COMPANY, INCLUDING AN
OPINION OF COUNSEL SATISFACTORY TO IT THAT REGISTRATION
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE LAWS IS
NOT REQUIRED) OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT."
(ii) Any legend required by any applicable law.
(e) The Purchaser is an "accredited investor" as such term is defined
in Rule 501(a)(1) promulgated pursuant to the Securities Act.
(f) The Purchaser's financial condition is such that it is able to
bear the risk of holding the Shares for an indefinite period of time.
(g) The Purchaser has such knowledge and experience in financial and
business matters and in making high risk investments of this type and is
capable of evaluating the merits and risks of the purchase of the Shares.
The Purchaser has conducted its own due diligence with respect to the
Offering contemplated hereby, has received all the documents and
information regarding the Company that the Purchaser has requested, has
been afforded the opportunity to ask questions of and receive answers from
officers or other representatives of the Company concerning Company's
business, assets and financial position, and after conducting such due
diligence is not aware of any breach of any of the representations and
warranties of the Company contained in this Agreement.
(h) There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf
of the Purchaser, and the Purchaser agrees to indemnify and hold the
Company harmless against any damages incurred as a result of any such
claims.
(i) The Purchaser acknowledges that the Company will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and
agreements and agrees that, if any of the acknowledgments, representations
and agreements are no longer accurate, it shall promptly notify the
Company, and the Company acknowledges that the representations and the
agreements of the Purchaser herein are without prejudice to the
representations and warranties of the Company contained in Section 4 above.
6. Registration Rights. The Purchaser shall have registration rights with
respect to the Shares as detailed in the Registration Right Agreement which is
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attached as Schedule "A" of this Agreement.
7. Covenant of the Company. The Company covenants and agrees as follows:
The Company shall use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date, and to satisfy all conditions precedent
to the delivery of the Purchase Price.
8. Covenants of the Purchaser. The Purchaser covenants and agrees as
follows:
(a) The Purchaser shall use its reasonable best efforts to do and
perform all things required or necessary to be done and performed under
this Agreement by it prior to the Closing Date, and to satisfy all
conditions precedent to the delivery of the Shares.
(b) The Purchaser agrees that from the date hereof until the fifth
anniversary of the Closing Date, it will not, and will not permit any of
its Affiliates, as defined in the Securities Act, to directly or indirectly
or in conjunction with or through any Associate (as defined in Rule 12b-2
of the Exchange Act), (i) solicit proxies with respect to any capital stock
or other voting securities of the Company under any circumstances, or
become a "participant" in any "election contest" relating to the election
of directors of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A of the Exchange Act) or (ii) make an offer for the
acquisition of substantially all of the assets or capital stock of the
Company or induce or assist any other person to make such an offer or (iii)
form or join any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any capital stock or other voting securities
of the Company for the purpose of accomplishing the actions referred to in
clauses (i) and (ii). The covenant contained in this section 10(b) shall
expire in relation to the Purchaser upon the sale by the Purchaser of the
Shares issued to it hereunder.
9. Miscellaneous. This Agreement has been and is made for the benefit of
the Purchaser and the Company, and their respective successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from the Purchaser merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Purchaser to Koor Industries Limited, Beit Platinum, Ha'arbaah 21
Street, Tel Aviv, attention: Yosef Ben Shalom, with a copy to Alan Sacks,
Herzog, Fox and Neeman, 4 Weismann Street, Tel Aviv and (b) if to the Company,
to Yehuda Harats, Electric Fuel Ltd., Western Industrial Zone, P.O. Box 641,
Bet Shemesh 99000, Israel, with a copy to Dan Geva or Raanan Lerner, Adv.,
Meitar, Liquornik, Geva & Co., 16 Abba Hillel Silver Road, Ramat Gan 52506,
Israel.
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This Agreement shall be governed by and construed in accordance with the
laws of the State of Israel, without regard to any conflicts or choice of law
principles which would cause the application of the internal laws of any
jurisdiction other than the State of Israel.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
ELECTRIC FUEL CORPORATION
By___________________________
Title:
Agreed and accepted:
KOOR INDUSTRIES LTD.
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Exhibit 4.2
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REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the" AGREEMENT") is made as of the 17th day
of May, 2000, by and between Electric Fuel Corporation ("EFC") and Koor
Industries Limited ("KOOR").
RECITALS
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WHEREAS, Koor has purchased certain Common Stock of EFC in accordance with a
Share Purchase and Agreement (the "INVESTMENT AGREEMENT"), dated as of May 17,
2000, made by and among EFC and Koor.
WHEREAS, EFC would like to grant Koor certain registration rights with respect
to their Common Stock in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
CERTAIN DEFINITIONS
The term "Act" means the Securities Act of 1933, as amended.
The term "Form S-3" means such form under the Act as in effect on the date
hereof or any registration form under the Act subsequently adopted by the SEC as
a successor thereto which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
The terms "register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
The term "Holder" refers to a holder of Registrable Securities.
The term "Registrable Securities" means all EFC Common Stock purchased by Koor
under the Investment Agreement; provided, however, that any Common Stock that
could be distributed by the holder thereof (in accordance with applicable law)
within three (3) months without the registration of such shares, shall not be
deemed to be Registrable Securities.
The term "SEC" shall mean the Securities and Exchange Commission.
REGISTRATION RIGHTS
Following the Closing of the Investment Agreement, EFC shall file as soon
as possible with the SEC a registration statement on Form S-3 (the "Registration
Statement") and shall use its best reasonable efforts to have such Registration
Statement to be declared effective as soon as possible with the SEC, which shall
include all of the Common Stock issued to Koor under the Investment Agreement.
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LOCK UP BY KOOR
Koor undertakes not to:
Sell, transfer, pledge or otherwise dispose of any of the Common Stock issued to
it under the Investment Agreement prior to the completion of 2 months as of the
closing of the Investment Agreement.
Sell, transfer, pledge or otherwise dispose of more than 33.33% of the Common
Stock issued to it under the Investment Agreement prior to the completion of 4
months as of the closing of the Investment Agreement.
Sell, transfer, pledge or otherwise dispose of more than 66.66% of the Common
Stock issued to it under the Investment Agreement prior to the completion of 6
months as of the closing of the Investment Agreement.
Notwithstanding anything to the contrary herein, Koor may enter into private
Hedging transactions with respect to the Registrable Securities.
None of the information supplied or to be supplied by EFC for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement are filed with the SEC and at the time they become
effective under the Act, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statement therein not misleading.
EFC will pay all expenses in connection with the filing of the Registration
Statement, other than expenses of Koor's counsel, and shall keep the
Registration Statement effective and current until the completion of a period of
18 months as of the date the completion of the lock up on the Common Stock held
by Koor as detailed in Section 3.1 above. plus any applicable Disclosure
Blackout Period, Non-Disclosure Blackout Period and Primary Offering Black Out
Period (collectively, the "Effectiveness Period").
With a view to making available to the Holder the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of EFC to the public
without registration or pursuant to the registration statements on Form S-3, EFC
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other documents
required of EFC under the Securities Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request a written statement by EFC that it
has complied with the foregoing subsections 6(a) and 6(b).
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In the event that Koor shall unreasonably delay any action required to be taken
by it in order for EFC to be able to file a Registration Statement in compliance
with the foregoing provisions, EFC shall not be deemed to be in breach of these
provisions in respect of non-registration of the pertinent shares of Koor under
such Registration Statement.
If EFC determines in good faith that the Registration Statement includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein as necessary to make the statements therein not misleading
in light of the circumstances then existing, EFC shall promptly make such
disclosure and amend any such Registration Statement as may be required under
applicable securities laws to keep such Registration Statement effective, and
Koor shall, upon receipt of notice from EFC to that effect, be prohibited from
reselling any EFC Common Stock for a period of 60 days ("Disclosure Blackout
Period"), unless EFC notifies them of the earlier termination of any Disclosure
Blackout Period; provided, however, that in no event shall a cumulative
Disclosure Blackout Periods exceed 60 days during any 12-month period.
Notwithstanding the aforesaid, if EFC's Board of Directors determines that the
registration and distribution of the EFC Common Stock pursuant to a Registration
Statement would interfere with any pending financing, acquisition, public
offering, corporation reorganization or any other material corporate development
involving EFC (or would require premature disclosure thereof), during the
Effectiveness Period, EFC may at any time and from time to time give Koor
written notice of such determination and upon receipt of such notice, Koor shall
be prohibited from reselling any EFC Common Stock for a period of up to 60 days
(a "Non-Disclosure Blackout Period"), unless EFC notifies Koor of the earlier
termination of any Non-Disclosure Blackout Period; provided, however, that in no
event shall the cumulative Non-Disclosure Blackout Period exceed 120 days during
the Effectiveness Period.
In addition, if EFC sells shares of its Common Stock in an underwritten public
offering (the "Primary Offering") pursuant to a registration statement, Koor
shall be prohibited from reselling any EFC Common Stock for a period of 180 days
from the effective date of such Primary Offering (a "Primary Offering Black Out
Period"), unless EFC notifies Koor of the earlier termination of such Primary
Offering Black Out Period.
INDEMNIFICATION RELATING TO THE REGISTRATION STATEMENT
To the extent permitted by law, EFC will indemnify and hold harmless the Holder,
the partners, officers, directors and shareholders of the Holder, legal counsel
and accountants for the Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls Holder or underwriter
within the meaning of the Securities Act or the 1934 Act against any losses,
expenses, claims, damages, or liabilities to which they become subject under the
Securities Act, the 1934 Act or other United States federal or state laws or the
securities laws of the State of Israel or any other jurisdiction in which the
Registrable Shares are sold, insofar as such losses, expenses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"violation"): (i) any untrue statement of a material fact contained in
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such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, or (iii) any violation or
alleged violation by the Company of the Securities Act, the 1934 Act, any
Federal or state securities law or any rule or regulation promulgated under the
Securities Act, the 1934 Act or any federal or state securities law, or any of
the securities laws of the State of Israel or any other jurisdiction in which
the Registrable Shares are sold or any rule or regulation thereunder; and EFC
will reimburse each such Holder, officer or director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to the Holder, underwriter or controlling person in any such
case for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished to the Company expressly for
use in connection with such registration by the Holder, underwriter or
controlling person provided further, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter, or any person controlling such Holder or
underwriter, from whom the person asserting any such losses, claims, damages or
liabilities purchased shares in the offering, if a copy of the prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such Holder or
underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the shares to such person, and
if the prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
To the extent permitted by law, each selling Holder will indemnify and hold
harmless EFC, each of its directors, each of its officers who have signed the
Registration Statement, each person, if any, who controls EFC within the meaning
of the Securities Act, any underwriter (within the meaning of the Securities
Act) for EFC, any person who controls such underwriter, and any Holder selling
securities in such registration statement or any directors or officers or any
persons controlling such parties, against any losses, claims, expenses, damages,
or liabilities to which any of the forgoing persons become subject under the
Securities Act, the 1934 Act or other United States federal or state securities
law, or any of the securities laws of the State of Israel or any other
jurisdiction in which the Registrable Shares are sold, insofar as such losses,
expenses, claims, damages, liabilities (or actions in respect thereto) arise out
of or are based upon any Violation (including alleged Violation), in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished to EFC by such Holder
expressly for use in connection with such registration; and each such Holder
will reimburse any persons intended to be indemnified pursuant to this section
for any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity
<PAGE>
agreement contained in this Section shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld: provided that in no event shall any indemnity
under this Section exceed the gross proceeds from the offering received by such
Holder.
Promptly after receipt by an indemnified party of notice of the commencement of
any action (including any governmental action), such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 11, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented
without conflict by one counsel) shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to notify an indemnifying party in
writing within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnifying party under this Section
11, but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 11.
If the indemnification provided for in this Section 11 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
The obligations of EFC and the Holder under this Section 11 shall survive the
completion of any offering of Registrable Securities hereunder.
MISCELLANEOUS.
Further Assurances. Each of the parties hereto shall perform such further acts
and execute such further documents as may reasonably be necessary to carry out
and give full effect to the provisions of this Agreement and the intentions of
the parties as
<PAGE>
reflected thereby.
Governing Law; Jurisdiction. This Agreement shall be governed by and construed
according to the laws of the State of Israel, without regard to the conflict of
laws provisions thereof. Any dispute arising under or in relation to this
Agreement shall be resolved in the competent court of Tel Aviv-Jaffa district,
and each of the parties hereby submits irrevocably to the jurisdiction of such
court.
Successors and Assigns. This Agreement and the rights hereunder shall be deemed
to be solely for the benefit of Koor and its successors, and the registration
rights hereunder may not be assigned or transferred to third parties.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall constitute
one and the same instrument.
[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
hereinabove set forth.
_________________________ _______________________
ELECTRIC FUEL CORPORATION KOOR INDUSTRIES LIMITED
BY:____________ BY:____________
<PAGE>
Exhibit 4.3
-----------
TERMINATION AND RELEASE AGREEMENT
This Termination and Release Agreement (the "TERMINATION AGREEMENT") is
entered into as of May 17, 2000, by and among Electric Fuel Corporation, a
company incorporated under the laws of Delaware, with principal offices at
Western Industrial Zone, P.O. Box 641, Bet Shemesh 99000, Israel ("EFC"),
Tadiran Limited, a company incorporated under the laws of the State of Israel,
with principal offices at [_______] ("TADIRAN"), Tadiran Batteries Limited, a
company incorporated under the laws of the State of Israel, with principal
offices at [_______] ("TADIRAN BATTERIES"), Tadiran Electric Industries
Corporation, a company incorporated under the laws of the State of [___], with
principal offices at [_______] ("TEI"), Koor Industries Ltd., a company
incorporated under the laws of the State of Israel, with principal offices at
Beit Platinum, Ha'arbaah 21 Street, Tel Aviv, Israel ("KOOR"), Robert S. Ehrlich
and Yehuda Harats
WITNESSETH
WHEREAS EFC, Tadiran, Tadiran Batteries and TEI are parties to a Share
and Assets Purchase Agreement (the "MERGER AGREEMENT"), dated as of
March 15, 2000, which is attached as SCHEDULE "A" hereto; and
WHEREAS EFC and Koor are parties to a Common Stock Purchase Agreement
(the "PURCHASE AGREEMENT"), dated as of March 15, 2000, which is
attached as SCHEDULE "B" hereto; and
WHEREAS Robert S. Ehrlich, Yehuda Harats, Koor and Tadiran are parties to
a Voting Rights Agreement (the "VOTING AGREEMENT"), dated as of March
15, 2000, which is attached as SCHEDULE "C" hereto; and
WHEREAS EFC, Tadiran and Koor are parties to a Registration Rights
Agreement (the "REGISTRATION AGREEMENT"), dated as of March 15, 2000,
which is attached as SCHEDULE "D" hereto; and
WHEREAS the parties wish to terminate and revoke the Merger Agreement and
the Voting Agreement and make certain changes to the provisions of the
Purchase Agreement and the Registration Agreement, all in accordance
with the terms set forth below
NOW, THEREFORE, for value received herein, the parties hereby agree as
follows:
Termination of the Merger Agreement and the Voting Agreement: Reference is made
to the New Purchase Agreement (as such term is defined in Section 0 below). The
term "Closing" as used herein shall have the same meaning ascribed to such a
term in the New Purchase Agreement. As of and subject to the Closing of the
transactions contemplated under the New Purchase Agreement, the Merger Agreement
and the
<PAGE>
Voting Agreement (collectively, the "Agreements") shall be terminated by mutual
consent (which is hereby given) of all of the parties thereto, shall be of no
legal force and effect and shall not bind any of the parties thereto with
respect to any representations, warranties, covenants or actions to be taken by
each such party pursuant to such Agreements. As of the Closing every party to
the Agreements does hereby release, acquit and forever discharge each of the
other parties to the Agreements from any and all claims, demands, liabilities,
responsibilities, disputes, causes of action and obligations relating to such
Agreements.
Amendment of the Purchase Agreement and the Registration Agreement: As of
and subject to the Closing, the provisions of the Purchase Agreement and the
Registration Agreement shall be amended and replaced with the purchase agreement
(the "New Purchase Agreement") and the registration agreement (collectively, the
"New Agreements") attached hereto as Schedules 2A and 2B. The parties agree that
as of the Closing the terms of the New Agreements supercede and revoke the
terms of the Purchase Agreement and the Registration Agreement and, without
derogation from the terms of the New Agreements which shall be in full force and
effect, release, acquit and forever discharge each of the other parties to the
Purchase Agreement and the Registration Agreement from any and all claims,
demands, liabilities, responsibilities, disputes, causes of action and
obligations relating to such agreements.
Amendments, Waivers, Etc. This Termination Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the entering into and delivery of a written agreement entered into by the
parties hereto.
Effect: This Termination Agreement shall enter into effect upon the Closing
of the New Purchase Agreement and the consummation of the Offering (as such a
term is defined in the New Purchase Agreement) thereunder.
Notices. For purposes of this Termination Agreement, the addresses of the
parties shall be as set forth in the New Agreements.
No Waiver. The failure of any party hereto to exercise any right, power or
remedy provided under this Termination Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
This Termination Agreement may be entered into in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one and the same instrument.
Governing Law. This Termination Agreement shall be governed and construed
in accordance with the laws of the State of Israel, without giving effect to the
principles of conflicts of law thereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Termination Agreement to be
duly signed on May 17, 2000.
Electric Fuel Tadiran Electric Tadiran Limited Tadiran Batteries
Corporation Industries Limited
Corporation
By:_________ By:_______ By:_______ By:_______
Koor Industries Robert S. Ehrlich Yehuda Harats
Ltd.
By: ________ __________ __________
